How Did You Decide You Could Afford To Buy A Home?

How Did You Decide You Could Afford to Buy a Home?

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Buying a home is a big deal. It's probably the most expensive purchase you'll ever make, and it's not a decision to be made lightly. So we want to know: how did you decide you could afford to buy a home?

Right now, it's very challenging to try and buy your first home. What sealed the deal for you? Tell us in the comments.


Comments

    We went & spoke with a mortgage broker, just to see how far off we were. After going through everything at that point, we realised we were in a far better position than we thought, & were able to get into the market!

    Could we afford it? Pretty much it.

    Had we and could we save enough for a deposit? Could we afford the repayments plus more if interest rates went up. Could we afford costs associated with owning a house (repair costs, maintenance etc.)

    Really its just about working out if you can comfortably pay for everything without putting yourself into financial stress. We had saved for a while and got a bit of money from my parents so that helped out.

    Pretty much what mickmok said. We sat down and did our sums. We were already in the habit of budgeting all our expenses. It was a matter of figuring out how much of a deposit we could save, what sort of mortgage payments could we reasonably afford (also allowing for higher interest rates and maintenance costs etc).

    It was an expensive endeavour, of course, and it took a few years of fairly frugal living to save up a 20% deposit to avoid mortgage insurance. We went to a mortgage broker who helped a lot, and also borrowed less than half of what the banks would actually lend us. That's pretty important, actually - just because the banks will lend you a shedload doesn't mean you should actually borrow that amount - you don't want all your income to go towards your mortgage, that's how you end up on House Rules!

      I've heard they'll offer you crazy amounts. My brother (a cop) and his wife (admin assistant) got offered up to $900K for their loan. The repayments would have meant that they had $200 left over each pay, but apparently that is doable as far as the bank is concerned.

    Government announced they were doubling the first home owner's grant. And we got another grant for building - all up I think it was $21 000. Dad went put up a unit he had as guarantee on the loan so we didn't need a deposit and we jumped right in.

    Once we own 80%, will look at switching the mortgate to one of those online only places with cheaper rates.

    We went to the banks and a mortgage broker, and unfortunately can't, and probably never will be able to afford a home.

    1. Checked online real estate pages to see how much my first house might cost.
    2. Ensured I had at least 5% of the cost of the house in savings.
    3. Checked repayment calculators on banks to see if I can afford repayments for a loan of 95% of the cost of the house.
    4. Did a rough budget (council rates, electricity, etc) based on what my family & friends spend, worked out if I could comfortably afford that + repayments.
    5. Once I was confident, I spoke with a mortgage broker to create a plan and actually see if the bank was willing to lend me money.

    Again, repeating what others have said - we (I) did the sums. It's extraordinary how many people borrow right to the hilt and find themselves in trouble a couple of years down the line. We've got savings to keep ourselves 6 months ahead of the mortgage and two stable jobs. If worst comes to worst, that savings buffer would allow us to sell and get out without carrying a large debt into the future.

    The greatest difficulty for me, personally, was growing up in a family with very little money. Savings were always a barrier against Bad Stuff, most commonly urgent car repairs, essential appliances or larger than expected bills. Choosing to go from having plenty of savings, to carrying a (almost incomprehensibly-) large debt was genuinely terrifying.

    I already had a deposit saved so I roughed out a budget based on the bills my folks paid (4 person, double storey house). I could afford that on my own without my girlfriend having to work so we went for it. Any money she earns gets saved for a rainy day.

    To give hope to all the single people daunted by the fact every comment here refers to 'we' not 'I', I decided I could afford to buy the place I wanted after talking with my accountant and figuring out that my savings were enough of a deposit to get my repayments into a comfortable place. A boring story about a really good day. =P

    My wife and I recently decided to start looking to buy a house. We made this decision after having to deal with terrible real estate agents and lazy owners in the rental market. Realistically, we could have bought one before but we wanted to save more. But not having to wait for 6-9 months to get someone to come out and fix the dead bolt on the front door is priceless.

    Well basically there was only about $80 a week difference from renting in repayments - so used the builders grant as a deposit and had our house built. That was as a single income family (not a particulary good single income either). It helps that it was only $300k for a new 5 bed home where I live.

    My girlfriend (now wife) was the instigator. We started doing our research into areas we were interested in, and sat down with Excel to do our scenario analyses. We're both numerate people so we started the what-ifs... what if our loan is this much? What if interest rates hit the Keating-sphere? And so on.

    We found the parameters we could afford, and then started the exercise of cutting unnecessary expenses out of our budget, on paper, to see what effect it had on our loan-to-be. When we got the loan, we ended up living like monks to smash it as fast as possible.

    It's a your-mileage-may-vary thing, though. Everyone's situation is different, but I think it's crucial to be able to sit down in Excel and plot it out.

      +1 for the not so accountants, most mortgage brokers can do that for you

    Started in the workforce 10 years ago and saved my butt of with my partner. Bought a house in a leafy suburb within 5 years. I had to trade a holiday or two - but looking at my friends/relatives of a similar age that now can't get anything I am relieved with my choice.

    Remember - land appreciates, homes depreciate. Don't buy an apartment.

    Went and looked at some display homes and fell in love with one.
    Scheduled an appointment with a mortgage broker and found out that not only could we afford it, the repayments would be significantly less per month than what we are currently paying in rent.

    The housing construction grant for South Australia also helped a lot as we didn't quite have enough deposit and this tipped us over the edge.

    We found a block in what we think is a 'hidden gem' before the prices boom when everyone else discovers how nice it is.

    My best advice is to shop around. Don't but the first nice block and builder you look out without at least considering other lesser known and cheaper areas/builders

    Got home one day and saw a for sale sign out the front of our apartment block. The unit downstairs was up for sale. It was bigger and had a courtyard. The trick was it was the week of Christmas and we (fiancee at the time) were heading away for a week on boxing day.

    The next day was the weekend and we called a mortgage broker to tee up a time to see him Monday. Monday came and we had a chat. We wanted to keep as much money as possible for renovations so got a parent to go guarantor for a 105% loan. All good. Repayments were easily doable.

    Went on holidays and came back in the new year. Made an offer the first day of business and it was accepted. Signed the papers at the first open for inspection where there was about 20 people walking through. Felt good.

    It wasn't a complete impulse buy. We did the sums to see how we could manage payments and service the loan. Would not have gone through with it if we wouldn't be able to easily cover things with higher interest rates. The fact it was a private sale and unit was in bad condition (reno potential) was a real bonus as well.

    Like most people here, did the maths.

    The unit we're living in came up for sale at around when we were starting to shop around. buying straight from the owner meant we could skip real estate fees, we could manage a 20% deposit, and strata + mortgage + rates added up to not much more than rent. We should be able to cover repayments even if one of us is out of work.

    Has anyone here that can't afford a CBD/urban home looked in to buying a rural or semi-rural as an investment property?

    We were living in a one bedroom apartment and looking for a new place. We made the decision that we weren't going to look at buying a home for a while yet because we'd need to save up a deposit. 2 days later, we changed our mind. KRudd announced the doubling of the first home buyers grant.
    We looked into it and found we'd be able to get $24000 if the home we bought matched certain criteria. We asked around at the local real estate agents and one of them had a home that almost matched. We wound up getting $21000 for the first home buyers grant, paid every drop of our savings as a deposit ($2000) and bought the place for $260k.

    My partner was working full time at KFC and I'd just been promoted to full time from casual at an ISP. In 12 months I'd gone from not paying tax at all to getting a promotion and buying a house.

    Realistically, it wasn't a smart time for us to buy since our incomes weren't strong and the global economy was in the shitter, but we were able to afford it, the bank approved a 95% loan, and about 6 years later we're still here.

    When it concerns the issue of finances, it is best to seek professional advice from an expert like a realtor. They are more experienced in this field and they also study market trends so they know when is the best time to buy or sell. You might be surprised that your financial status might just be more feasible than you thought.

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